Math-challenged Stateopians – III

Liberal /Lefties (let’s call them “Stateopians”) like to say that government “creates jobs”. They’re right. It does…the wrong kinds of jobs. What’s wrong with government jobs? They don’t make profits.  A new DMV worker or TSA groper does not create value, as measured by profits. Quite the opposite, they bleed resources away from those that generate profits. This is bad.

This is where conservatives and Stateopians talk past each other. When conservatives speak of creating jobs, they speak of jobs that create added value (i.e., profits). To math-challenged Stateopians, however, profits are bad.

So let me try to keep this simple.

Government spending comes from taxes. Most tax revenues are generated from profits, including corporate profits and, on a personal level, disposable income (i.e., “golden eggs”).

Other tax revenues are generated from assets, such as real estate, savings and inheritances (i.e., the geese that lay the golden eggs). If you increase taxes on assets, you starve the geese that lay the golden eggs. This means less golden eggs and fewer tax revenues. Eventually, the geese die of starvation.

On the other hand, if you feed the geese that lay the golden eggs by, for example, reduce the taxes paid against assets, they lay more golden eggs (i.e., profits), which increases tax revenues. More profits, more tax revenues. Reagan understood this.

This is where Stateopian ideas are truly math challenged: if you really want to increase and pay for government spending, you need to increase the ability of the economy to generate profits. Profits are good! The more the better. Instead of encouraging profit-making, they bad-mouth and discourage profit generation.

How come they can’t understand something so basic?

So, next time you hear a Stateopians bad-mouth corporate and personal profits, ask them, “where the heck do you think your government gets its money?”

I’ll bet they never thought of that.

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  1. says

    They would probably argue that government workers also pay taxes and that, hence, increases in government employment are self-funding in the manner of a perpetual motion machine.
    Part of the problem here is the math-challenged nature of so many people, including college graduates; part of it is that there are now so many people so far removed from the productive part of the economy that they really don’t even understand why it needs to exist.

  2. JKB says

    How come they can’t understand something so basic?

    Well, you see they have these “critical thinking” skills from their liberal arts education.  These “critical thinking” skills are like the problem solving learned in the maths and sciences but without reason or accountability.  And anyway, everyone with a fine Harvard education knows that money comes from daddy, whether that be your momma’s husband or big daddy government.

    By coincidence just this morning I watched this Idiots Guide to Public Sector that produces no wealth over at Maggie’s Farm.

  3. JKB says

    They would probably argue that government workers also pay taxes and that, hence, increases in government employment are self-funding in the manner of a perpetual motion machine.

    Not probably, definitely.  When I worked for the federal government, each year around tax time I would observe to others how when we pay taxes we were really just negotiating the kickback on our salary.  Don’t do this.  It will cause much argument and hostility.  I found no one who could accept that government employee wages were always going to be a net loss to the Treasury.  You see most government employees think of their office, agency, department as a separate entity so their federal government agency pays them but they pay taxes to the federal government.

    I also got a lot of grief over my radical idea that when ever possible, government employees and operations should defer to lawful commercial operations since more profit for the private sector operation meant more money for the Treasury.  I know, special privilege for government workers and all.  I was a radical.

  4. says

    You see most government employees think of their office, agency, department as a separate entity so their federal government agency pays them but they pay taxes to the federal government.
    It’s a feudal system really. They are loyal to their salt. Peasants who? That’s one benefit of learning history. Real history. It becomes really clear what people are doing politically once you understand the political dynamics of the past.

  5. SADIE says

    On the other hand, if you feed the geese that lay the golden eggs…
    Feed geese. Out of the question. They’re in the business of cracking and destroying eggs. Damn vegans!

  6. Michael Adams says

    The peasants are revolting, lately even more so.  “When Adam delved and Eve span, who was than the gentleman?” [rallying cry of the Peasants' Revolt, June, 1381]

  7. Danny Lemieux says

    Absolutely, David Foster.
    So, of $100 in government tax revenues, $0.75 is siphoned off to administration and waste, while $0.25 goes to the intended task (repairing roads, defense, providing government healthcare, etc.). However, even so, 25-30% of this total is recycled back to government kick-back in the form of taxes (…er, kickbacks, to use JKB’s term) paid by government workers.
    But, let’s not forget…government is efficient.

  8. says

    What a good, clear explanation, Danny.  I tried this on Mr. Bookworm, a Stateopian.  He sneered at my economic ignorance and, armed with his MBA, spent a good ten minutes trying to explain to me why government is virtually a profit center.  We spend a lot of time talking past each other.

  9. Danny Lemieux says

    Interesting, Book. Ask him if he can define “profit” and let me know what he says. That was going to be the topic of my next post.
    YM – yes, perfect pitch: government IS a laundering system for money. The QE2 example is just that.

  10. says

    When Obama mentioned A Civilian Security force as strong as the US military and as well funded, I keep thinking, “maybe he was talking about TSA and other union security employers”.
    Maybe those are the jobs he thinks he needs to create. Civilian Security force jobs.

  11. says
    People are stupid. That’s not an insult, just a fact. People are stupid, because they are smart. Not that they think they are smart, but because they are smart. Another little fact.
    Is not the TSA civlian? Is not the TSA a security function?
    Peace Corps, creating volunteer networks and increasing the size of the Foreign Service has Nothing to do with it.
    Think like the enemy, foolish humans. No other way you can master the Art of War in yon mortal span of life.

  12. SADIE says

    The QE2 example is just that.

    Which has me thinking, What’s the difference between the QE II and the QE 2  ?
    Tho former was the flagship of Cunard and the latter of a Canard.

  13. Charles Martel says

    Book, when are you going to do something about our room’s inveterate punster (punstrix? punsterette? punstrina?) SADIE?

    I’d propose locking her in a closet, but fear that she’d then take to banging on the door and yelling, “O-pun the door! O-pun the door!”

  14. says

    Oh, Charles.  After that one, I fear that you and Sadie deserve each other.

    The problem with Sadie’s puns is that they’re so clever.  Most puns deserve only groans, while hers almost invariably startle a hearty laugh out of me.  I’m sorry to say, therefore, that they’re here to stay.

    Sadie also keeps me humble.  Much as I love language, I’ve never been a punster.  I just don’t see words that way, and greatly admire those who do.

  15. Charles Martel says

    Apropos of nothing, Cunard sent its monster oceanliner, the Queen Mary 2, to San Francisco a few years ago. To get here, she had to sail around the Horn through the Strait of Magellan, a stretch of sea so capricious that even the best sailors in the greatest ships are reluctant to undertake it.

    While here, the QM2’s skipper seemed bemused by questions about whether sailing into danger’s way was something he shouldn’t have tried to avoid. “She is way too big for the Panama Canal,” he told local reporters, “and she’s built to take heavy seas.” Her milk run, he reminded them, is the North Atlantic, hardly known for its pacific ways. Without saying so, he begged comparison of the QM2 to the more delicate structures of the sedate Brobdingnagian liners that ply the Carribean and west Mexican waters.

    When she arrived at the Golden Gate, she was greeted by just about every craft on San Francisco Bay, including two fireboats, a fleet of party boats, schooners, ferries, motorboats, sailing craft, dorys, kayaks and canoes, either tooting, honking, belching, yelling or blasting greetings. Her captain later said the reception was the best of any port the ship had put into in an around-the-world cruise.

  16. SADIE says

    suek, we both heard it. I think the ‘official’ editing of reality is not a new ploy. What is new, is the internet and somewhere that speech is recorded with the full initial impact. Every president knows that eventually his speeches and such eventually end up in a presidential library. Future historians have their work cut out for them. It may actually be impossible in a 100 years to get it right at all amidst edited speeches, photo shop and now Net Neutrality (COICA).
    Danny’s article focused on being ‘math challenged’ – what happens when you don’t have all the numbers and now ..not even all the words.

  17. Mike Devx says

    I’m going to rant here.
    A recent American Thinker article has our National Overlords proposing another “progressive” idiocy:
    1) It is a dangerously broad regulatory bill giving extensive discretionary power to the FDA over the entire food supply; 2) It would impose one-size-fits-all-regulations on thousands of small and mid-sized farmers, small-scale local farms and food producers; 3) It attempts to limit the authority of our own domestic U.S. laws when it includes language ensuring that our US law will not disturb other international agreements that we have made.
    This is from Senate bill 510, ‘The Food Safety Modernization Act’.   Ah, MODERNIZATION! I must support THAT!!!
    Indeed, rather, I think not.  Let me make a digression.  When I see an ad for a Hollywood comedy, and the voiceover says it is “funny”, or the ad says it is “funny”, I know I need to avoid that movie.  A comedy that needs to INFORM me that it will be “funny”, is likely to be massively un-funny.   Similarly, any government bill that contains the word “MODERN”, or “MODERNIZATION” should henceforth be voted down with a chorus of “NO!” votes.  Any bill that has to include the word “modernization” in its title is a bill guaranteed to be regressing us.  End of digression.
    Now for the rant, and pardon the language.  Things are getting to the point where I want to run screaming into the Senate or House chamber and stand in front of them and just scream: “Get Out!  Stay Out!  Get Out Of My F#&$CKING LIFE!  Stay Out Of My F#*#*CKING LIFE!  Get Out! Get Out! Get Out!  Stay Out! Stay Out!  F#*#CK YOU!  And The Horse You Rode In On!!!”
    There are days I simply cannot take it anymore.
    OR as a commenter on another American Thinker article put it more politely:
    Spending cuts eliminate no unconstitutional Federal operation, only reduces spending which will in time, be increased again to buy votes and advance socialism. To reform the Federal government and permanently reduce spending and increase freedom, we have to cut off whole areas of Federal encroachment. The Federal government does not belong in Education, Labor, Energy technology development (corporate welfare), Homeland inSecurity (our own special KGB and federal disaster relief operations), Arts, money to the UN and foreign governments…and on and on the Federal encroachment goes.   Cutting spending without eliminating the scope of the Federal government will do nothing to end the deficit in the long term.

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